AB816,107,18
5(2) Summary process. An order under sub. (1) is effective on the date of
6issuance. Upon issuance of the order, the administrator shall promptly serve each
7person subject to the order with a copy of the order and a notice that the order has
8been entered. The order must include a statement of any civil penalty or costs of
9investigation the administrator will seek, a statement of the reasons for the order,
10and notice that, within 15 days after receipt of a request in a record from the person,
11the matter will be scheduled for a hearing. If a person subject to the order does not
12request a hearing and none is ordered by the administrator within 30 days after the
13date of service of the order, the order, including the imposition of a civil penalty or
14requirement for payment of the costs of investigation sought in a statement in the
15order, becomes final as to that person by operation of law. If a hearing is requested
16or ordered, the administrator, after notice of and opportunity for hearing to each
17person subject to the order, may modify or vacate the order or extend it until final
18determination.
AB816,107,23
19(3) Procedure for final order. If a hearing is requested or ordered pursuant
20to sub. (2), a hearing must be held pursuant to ch. 227. A final order may not be
21issued unless the administrator makes findings of fact and conclusions of law in a
22record in accordance with ch. 227. The final order may make final, vacate, or modify
23the order issued under sub. (1).
AB816,108,3
1(4) Civil penalty. In a final order under sub. (3), the administrator may impose
2a civil penalty in the form of an administrative assessment up to $5,000 for a single
3violation or up to $250,000 for more than one violation.
AB816,108,6
4(5) Costs. In a final order, the administrator may charge the actual cost of an
5investigation or proceeding for a violation of this chapter or a rule adopted or order
6issued under this chapter.
AB816,108,12
7(6) Filing of certified final order with court; effect of filing. If a petition
8for judicial review of a final order is not filed in accordance with s. 551.609, the
9administrator may file a certified copy of the final order with the clerk of a court of
10competent jurisdiction. The order so filed has the same effect as a judgment of the
11court and may be recorded, enforced, or satisfied in the same manner as a judgment
12of the court.
AB816,108,21
13(7) Enforcement by court; further civil penalty. If a person does not comply
14with an order under this section, the administrator may petition a court of competent
15jurisdiction to enforce the order. The court may not require the administrator to post
16a bond in an action or proceeding under this section. If the court finds, after service
17and opportunity for hearing, that the person was not in compliance with the order,
18the court may adjudge the person in civil contempt of the order. The court may
19impose a further civil penalty against the person for contempt in an amount not less
20than $5,000 but not greater than $100,000 for each violation and may grant any
21other relief the court determines is just and proper in the circumstances.
AB816,108,24
22551.605 Rules, forms, orders, interpretative opinions, and hearings. 23(1) Issuance and adoption of forms, orders, and rules. The administrator may do
24any of the following:
AB816,109,4
1(a) Issue forms and orders and, after notice and comment, adopt and amend
2rules necessary or appropriate to carry out this chapter, and repeal rules, including
3rules and forms governing registration statements, applications, notice filings,
4reports, and other records.
AB816,109,65
(b) By rule, define terms, whether or not used in this chapter, but those
6definitions may not be inconsistent with this chapter.
AB816,109,87
(c) By rule, classify securities, persons, and transactions and adopt different
8requirements for different classes.
AB816,109,17
9(2) Findings and cooperation. Under this chapter, except as provided under
10s. 551.412 (4g) (b) and (c), a rule or form may not be adopted or amended, or an order
11issued or amended, unless the administrator finds that the rule, form, order, or
12amendment is necessary or appropriate in the public interest or for the protection
13of investors and is consistent with the purposes intended by this chapter. In
14adopting, amending, and repealing rules and forms, s. 551.608 applies in order to
15achieve uniformity among the states and coordination with federal laws in the form
16and content of registration statements, applications, reports, and other records,
17including the adoption of uniform rules, forms, and procedures.
AB816,109,23
18(3) Financial statements. Subject to section 15 (h) of the Securities Exchange
19Act and section 222 of the Investment Advisers Act of 1940, the administrator may
20require that a financial statement filed under this chapter be prepared in accordance
21with generally accepted accounting principles in the United States and comply with
22other requirements specified by rule adopted or order issued under this chapter. A
23rule adopted or order issued under this chapter may establish:
AB816,110,3
1(a) Subject to section 15 (h) of the Securities Exchange Act and section 222 of
2the Investment Advisers Act of 1940, the form and content of financial statements
3required under this chapter.
AB816,110,44
(b) Whether unconsolidated financial statements must be filed.
AB816,110,65
(c) Whether required financial statements must be audited by an independent
6certified public accountant.
AB816,110,13
7(4) Interpretative opinions. The administrator may provide interpretative
8opinions or issue determinations that the administrator will not institute a
9proceeding or an action under this chapter against a specified person for engaging
10in a specified act, practice, or course of business if the determination is consistent
11with this chapter. A rule adopted or order issued under this chapter may establish
12a reasonable charge for interpretative opinions or determinations that the
13administrator will not institute an action or a proceeding under this chapter.
AB816,110,16
14(5) Effect of compliance. A penalty under this chapter may not be imposed
15for, and liability does not arise from, conduct that is engaged in or omitted in good
16faith in conformity with a rule, form, or order of the administrator under this chapter.
AB816,110,20
17(6) Presumption for public hearings. A hearing in an administrative
18proceeding under this chapter must be conducted in public unless the administrator
19for good cause consistent with this chapter determines that the hearing will not be
20so conducted.
AB816,111,4
21551.606 Administrative files and opinions. (1) Public register of filings. 22The administrator shall maintain, or designate a person to maintain, a register of
23applications for registration of securities; registration statements; notice filings;
24applications for registration of broker-dealers, agents, investment advisers, and
25investment adviser representatives; notice filings by federal covered investment
1advisers that are or have been effective under this chapter or the predecessor act;
2notices of claims of exemption from registration or notice filing requirements
3contained in a record; orders issued under this chapter or the predecessor act; and
4interpretative opinions or no action determinations issued under this chapter.
AB816,111,6
5(2) Public availability. The administrator shall make all rules, forms,
6interpretative opinions, and orders available to the public.
AB816,111,12
7(3) Copies of public records. The administrator shall furnish a copy of a record
8that is a public record or a certification that the public record does not exist to a
9person that so requests. A rule adopted under this chapter may establish a
10reasonable charge for furnishing the record or certification. A copy of the record
11certified or a certificate by the administrator of a record's nonexistence is prima facie
12evidence of a record or its nonexistence.
AB816,111,17
13551.607 Public records; confidentiality. (1) Presumption of public
14records. Except as otherwise provided in sub. (2), records obtained by the
15administrator or filed under this chapter, including a record contained in or filed with
16a registration statement, application, notice filing, or report, are public records and
17are available for public examination.
AB816,111,19
18(2) Nonpublic records. The following records are not public records and are
19not available for public examination under sub. (1):
AB816,111,2220
(a) Information and records obtained by the administrator in connection with
21an audit or inspection under s. 551.411 (4) or a pending investigation under s.
22551.602.
AB816,112,223
(b) A part of a record filed in connection with a registration statement under
24ss. 551.301 and 551.303 to 551.305 or a record under s. 551.411 (4) that contains trade
1secrets or confidential information if the person filing the registration statement or
2record has asserted a claim of confidentiality or privilege that is authorized by law.
AB816,112,53
(c) A record that is not required to be provided to the administrator or filed
4under this chapter and is provided to the administrator only on the condition that
5the record will not be subject to public examination or disclosure.
AB816,112,66
(d) A nonpublic record received from a person specified in s. 551.608 (1).
AB816,112,97
(e) Subject to s. 551.406 (6) (a), any social security number, residential address
8unless used as a business address, and residential telephone number unless used as
9a business telephone number, contained in a record that is filed.
AB816,112,1210
(f) A record obtained by the administrator through a designee of the
11administrator that a rule or order under this chapter determines has been
12appropriately expunged from the administrator's records by the designee.
AB816,112,17
13(3) Administrator discretion to disclose. If disclosure is for the purpose of a
14civil, administrative, or criminal investigation, action, or proceeding or to a person
15specified in s. 551.608 (1), the administrator may disclose a record or information
16obtained in connection with an audit or inspection under s. 551.411 (4) or a record
17or information obtained in connection with a pending investigation under s. 551.602.
AB816,113,3
18551.608 Uniformity and cooperation with other agencies. (1) Objective
19of uniformity. The administrator shall, in its discretion, cooperate, coordinate,
20consult, and, subject to s. 551.607, share records and information with the securities
21regulator of another state, Canada, a Canadian province or territory, a foreign
22jurisdiction, the Securities and Exchange Commission, the United States
23Department of Justice, the Commodity Futures Trading Commission, the Federal
24Trade Commission, the Securities Investor Protection Corporation, a self-regulatory
25organization, a national or international organization of securities regulators, a
1federal or state banking or insurance regulator, and a governmental law
2enforcement agency to effectuate greater uniformity in securities matters among the
3federal government, self-regulatory organizations, states, and foreign governments.
AB816,113,7
4(2) Policies to consider. In cooperating, coordinating, consulting, and sharing
5records and information under this section and in acting by rule, order, or waiver
6under this chapter, the administrator shall, in its discretion, take into consideration
7in carrying out the public interest the following general policies:
AB816,113,88
(a) Maximizing effectiveness of regulation for the protection of investors.
AB816,113,99
(b) Maximizing uniformity in federal and state regulatory standards.
AB816,113,1110
(c) Minimizing burdens on the business of capital formation, without adversely
11affecting essentials of investor protection.
AB816,113,13
12(3) Subjects for cooperation. The cooperation, coordination, consultation,
13and sharing of records and information authorized by this section includes:
AB816,113,1614
(a) Establishing or employing one or more designees as a central depository for
15registration and notice filings under this chapter and for records required or allowed
16to be maintained under this chapter.
AB816,113,1717
(b) Developing and maintaining uniform forms.
AB816,113,1818
(c) Conducting a joint examination or investigation.
AB816,113,1919
(d) Holding a joint administrative hearing.
AB816,113,2020
(e) Instituting and prosecuting a joint civil or administrative proceeding.
AB816,113,2121
(f) Sharing and exchanging personnel.
AB816,113,2322
(g) Coordinating registrations under ss. 551.301 and 551.401 to 551.404 and
23exemptions under s. 551.203.
AB816,113,2424
(h) Sharing and exchanging records, subject to s. 551.607.
AB816,114,2
1(i) Formulating rules, statements of policy, guidelines, forms, and
2interpretative opinions and releases.
AB816,114,33
(j) Formulating common systems and procedures.
AB816,114,54
(k) Notifying the public of proposed rules, forms, statements of policy, and
5guidelines.
AB816,114,96
(L) Attending conferences and other meetings among securities regulators,
7which may include representatives of governmental and private sector organizations
8involved in capital formation, deemed necessary or appropriate to promote or achieve
9uniformity.
AB816,114,1210
(m) Developing and maintaining a uniform exemption from registration for
11small issuers, and taking other steps to reduce the burden of raising investment
12capital by small businesses.
AB816,114,17
13551.609 Judicial review. A final order issued by the administrator under this
14chapter is subject to judicial review in accordance with ch. 227, but administrative
15enforcement orders originally entered without hearing may be reviewed only if the
16party seeking review has requested a hearing within the time provided by s. 551.604
17(2).
AB816,115,2
18551.611 Service of process. (1) Signed consent to service of process. A
19consent to service of process complying with this section required by this chapter
20must be signed and filed in the form required by a rule or order under this chapter.
21A consent appointing the administrator the person's agent for service of process in
22a noncriminal action or proceeding against the person, or the person's successor or
23personal representative under this chapter or a rule adopted or order issued under
24this chapter after the consent is filed, has the same force and validity as if the service
25were made personally on the person filing the consent. A person that has filed a
1consent complying with this subsection in connection with a previous application for
2registration or notice filing need not file an additional consent.
AB816,115,9
3(2) Conduct constituting appointment of agent for service. If a person,
4including a nonresident of this state, engages in an act, practice, or course of business
5prohibited or made actionable by this chapter or a rule adopted or order issued under
6this chapter and the person has not filed a consent to service of process under sub.
7(1), the act, practice, or course of business constitutes the appointment of the
8administrator as the person's agent for service of process in a noncriminal action or
9proceeding against the person or the person's successor or personal representative.
AB816,115,12
10(3) Procedure for service of process. Service under sub. (1) or (2) may be
11made by providing a copy of the process to the office of the administrator, but it is not
12effective unless all of the following apply:
AB816,115,1713
(a) The plaintiff, which may be the administrator, promptly sends notice of the
14service and a copy of the process, return receipt requested, to the defendant or
15respondent at the address set forth in the consent to service of process or, if a consent
16to service of process has not been filed, at the last known address, or takes other
17reasonable steps to give notice.
AB816,115,2118
(b) The plaintiff files an affidavit of compliance with this subsection in the
19action or proceeding on or before the return day of the process, if any, or within the
20time that the court, or the administrator in a proceeding before the administrator,
21allows.
AB816,115,24
22(4) Service in administrative proceedings or civil actions by administrator. 23Service pursuant to sub. (3) may be used in a proceeding before the administrator or
24by the administrator in a civil action in which the administrator is the moving party.
AB816,116,4
1(5) Opportunity to defend. If process is served under sub. (3), the court, or the
2administrator in a proceeding before the administrator, shall order continuances as
3are necessary or appropriate to afford the defendant or respondent reasonable
4opportunity to defend.
AB816,116,9
5551.613 Jurisdiction. (1) Sales and offers to sell. Sections 551.301,
6551.302, 551.401 (1), 551.402 (1), 551.403 (1), 551.404 (1), 551.501, 551.506, 551.509,
7and 551.511 do not apply to a person that sells or offers to sell a security unless the
8offer to sell or the sale is made in this state or the offer to purchase or the purchase
9is made and accepted in this state.
AB816,116,14
10(2) Purchases and offers to purchase. Sections 551.401 (1), 551.402 (1),
11551.403 (1), 551.404 (1), 551.501, 551.506, 551.509, and 551.511 do not apply to a
12person that purchases or offers to purchase a security unless the offer to purchase
13or the purchase is made in this state or the offer to sell or the sale is made and
14accepted in this state.
AB816,116,17
15(3) Offers in this state. For the purpose of this section, an offer to sell or to
16purchase a security is made in this state, whether or not either party is then present
17in this state, if the offer meets any of the following criteria:
AB816,116,1818
(a) The offer originates from within this state.
AB816,116,2119
(b) The offer is directed by the offeror to a place in this state and received at the
20place to which it is directed, but for purposes of s. 551.301, an offer to sell which is
21not directed to or received by the offeree in this state is not made in this state.
AB816,116,24
22(4) Acceptances in this state. For the purpose of this section, an offer to
23purchase or to sell is accepted in this state, whether or not either party is then
24present in this state, if the acceptance meets all of the following criteria:
AB816,117,3
1(a) The acceptance is communicated to the offeror in this state and the offeree
2reasonably believes the offeror to be present in this state and the acceptance is
3received at the place in this state to which it is directed.
AB816,117,54
(b) The acceptance has not previously been communicated to the offeror, orally
5or in a record, outside this state.
AB816,117,16
6(5) Publications, radio, television, or electronic communications. An offer
7to sell or to purchase is not made in this state when a publisher circulates or there
8is circulated on the publisher's behalf in this state a bona fide newspaper or other
9publication of general, regular, and paid circulation that is not published in this
10state, or that is published in this state but has had more than two-thirds of its
11circulation outside this state during the previous 12 months, or when a radio or
12television program or other electronic communication originating outside this state
13is received in this state. A radio, television program, or other electronic
14communication is considered as having originated in this state if either the broadcast
15studio or the originating source of transmission is located in this state, unless any
16of the following apply:
AB816,117,1817
(a) The program or communication is syndicated and distributed from outside
18this state for redistribution to the general public in this state.
AB816,117,2119
(b) The program or communication is supplied by a radio, television, or other
20electronic network with the electronic signal originating from outside this state for
21redistribution to the general public in this state.
AB816,117,2522
(c) The program or communication is an electronic communication that
23originates outside this state and is captured for redistribution to the general public
24in this state by a community antenna or cable, radio, cable television, or other
25electronic system.
AB816,118,3
1(d) The program or communication consists of an electronic communication
2that originates in this state, but which is not intended for distribution to the general
3public in this state.
AB816,118,8
4(6) Investment advice and misrepresentations. Sections 551.403 (1), 551.404
5(1), 551.405 (1), 551.502, 551.505, and 551.506 apply to a person if the person engages
6in an act, practice, or course of business instrumental in effecting prohibited or
7actionable conduct in this state, whether or not either party is then present in this
8state.
AB816,118,14
9551.614 Fees and expenses. (1) Registration and notice filing fees and
10reporting. (a) There shall be a filing fee of $750 for every registration statement filed
11under s. 551.303 or 551.304, and for every notice filing under s. 551.302. If a
12registration statement is denied or withdrawn before the effective date or a
13pre-effective stop order is entered under s. 551.306, or a notice filing is withdrawn,
14the filing fee shall be retained.
AB816,118,2215
(b) 1. An indefinite amount of securities shall be registered for offer and sale
16in this state under a registration statement relating to redeemable securities issued
17by an open-end management company or a face amount certificate company, as
18defined in the Investment Company Act of 1940, and the applicant shall pay the fee
19under par. (a). The registrant also shall, within 60 days after the end of each fiscal
20year during which its registration statement is effective and within 60 days after the
21registration is terminated, file a report on a form prescribed by rule of the division.
22The form shall require the registrant to do one of the following:
AB816,118,2423
a. Elect not to include the information under subd. 1. b. and instead pay a fee
24of $1,500.
AB816,119,5
1b. Report the amount of securities sold to persons in this state during the
2preceding fiscal year or, if the registration is terminated, during the portion of the
3preceding fiscal year during which the registration was effective, and pay a fee of 0.05
4percent of the dollar amount of the securities sold to persons in this state, but not less
5than $150 nor more than $1,500.
AB816,119,146
2. An indefinite amount of securities is eligible for offer and sale in this state
7resulting from a notice filing under s. 551.302 for the initial offer of a federal covered
8security under section 18 (b) (2) of the Securities Act of 1933, if the filing party has
9notified the division of securities of the issuer's fiscal year, and the filing party pays
10the fee under par. (a). The filing party shall also, within 90 days after the end of each
11fiscal year following the filing under s. 551.302, and within 90 days after sales in this
12state have terminated, file a report to allow the division of securities to determine
13that the amount of the fee paid is correct. The report shall be on a form prescribed
14by rule of the division and shall require the filing party to do one of the following:
AB816,119,1615
a. Elect not to include the information under subd. 2. b. and instead pay a fee
16of $1,500.
AB816,119,2117
b. Report the amount of securities sold to persons in this state during the
18preceding fiscal year or, if sales have terminated, during the portion of the preceding
19fiscal year during which sales were made, and pay a fee of 0.05 percent of the dollar
20amount of the securities sold to persons in this state, but not less than $150 nor more
21than $1,500.
AB816,120,7
22(2) Fees related to Broker-dealers, agents, investment advisers, investment
23adviser representatives, and federal covered advisers. Every applicant for an
24initial or renewal license under s. 551.401, 551.402, 551.403, or 551.404 shall pay a
25filing fee of $200 in the case of a broker-dealer or investment adviser and $30 in the
1case of an agent representing a broker-dealer or issuer or an investment adviser
2representative. Every federal covered adviser in this state that is required to make
3a notice filing under s. 551.405 shall pay an initial or renewal notice filing fee of $200.
4A broker-dealer, investment adviser, or federal covered adviser maintaining a
5branch office within this state shall pay an additional filing fee of $30 for each branch
6office. When an application is denied, or an application or a notice filing is
7withdrawn, the filing fee shall be retained.
AB816,120,11
8(3) Examination expenses. The expenses reasonably attributable to the
9examination of any matter arising under this chapter shall be charged to the
10applicant, registrant, or licensee involved, but the expenses so charged shall not
11exceed such maximum amounts as the division of securities by rule prescribes.
AB816,120,15
12(4) Other fees. The division of securities may by rule require the payment of
13prescribed fees for delinquent or materially deficient filings of information or
14documents required under this chapter to be filed with the division or an
15organization designated under s. 551.406 (1) (intro.).
AB816,120,18
16(5) Fees paid to state. All fees and expenses collected by the division under this
17section shall be deposited into the general fund and credited to the appropriation
18account under s. 20.144 (1) (g).
AB816,120,22
19551.615 Statutory policy. This chapter shall be so construed as to effectuate
20its general purpose to make uniform the law of those states which enact the "Uniform
21Securities Act of 2002" and to coordinate the interpretation and administration of
22this chapter with related federal regulation.
AB816,120,2423
subchapter Vii
24
TRANSITION
AB816,121,2
1551.701 Effective date. This chapter takes effect on the effective date of this
2section .... [revisor inserts date].
AB816,121,11
3551.703 Application of act to existing proceeding and existing rights
4and duties. (1) Applicability of predecessor act to pending proceedings and
5existing rights. The predecessor act exclusively governs all actions or proceedings
6that are pending on the effective date of this subsection .... [revisor inserts date], or
7may be instituted on the basis of conduct occurring before the effective date of this
8subsection .... [revisor inserts date], but a civil action may not be maintained to
9enforce any liability under the predecessor act unless instituted within any period
10of limitation that applied when the cause of action accrued or within 5 years after the
11effective date of this subsection .... [revisor inserts date], whichever is earlier.
AB816,121,18
12(2) Continued effectiveness under predecessor act. All effective
13registrations under the predecessor act, and all administrative orders relating to the
14registrations, rules, statements of policy, interpretative opinions, declaratory
15rulings, no action determinations, and conditions imposed on the registrations under
16the predecessor act, remain in effect while they would have remained in effect if this
17chapter had not been reenacted. They are considered to have been filed, issued, or
18imposed under this chapter, but are exclusively governed by the predecessor act.
AB816,121,23
19(3) Applicability of predecessor act to offers or sales. The predecessor act
20exclusively applies to an offer or sale made within one year after the effective date
21of this subsection .... [revisor inserts date], pursuant to an offering made in good faith
22before the effective date of this subsection .... [revisor inserts date], on the basis of
23an exemption available under the predecessor act.
AB816, s. 17
24Section
17. 552.01 (6) (c) of the statutes is amended to read: